Bitcoin has added 38% to its USD value since the beginning of the month when it was trading around $16,846. This makes January the best performing month for the asset since October 2021, when it posted a 41% increase, according to Glassnode.
The jump was "driven by demand and short-term trading," the analyst firm reported in its weekly report on January 30. Glassnode also reported a stabilization in exchange flows following the collapse of FTX and panic situations from centralized exchanges.
"We also note that the initial impetus of exchange outflows, after the FTX effect has subsided to neutral, and is now offset by newly motivated inflows."
Glassnode also noted that Bitcoin on-chain transactions jumped over 50,000 per day over the past week. "We have not seen a corresponding increase in exchange deposits or withdrawal counts," Glassnode added.
Exchange-related transactions accounted for 35% of the total, a metric that has been declining since May 2021. Although exchange flows have normalized since the fall of FTX, the amount of BTC held is still declining.
The total Bitcoin balance held on the trading platform is around 2.25 million BTC, the report said. This represents 11.7% of the circulating supply and is at a multi-year low last seen in February 2018.
Glassnode added that the amount of BTC flowing in and out of the exchange is around $625 million per day in both directions. This suggests that exchange flows are now balanced following the turmoil at the end of 2022, when they were largely outflows.
"Today, net exchange flows have returned to neutral, reflecting subdued outflows,"
Most of the exchange's activity for the month was comprised of whale clusters (addresses with more than a thousand BTC), he said. In January, the whale cluster contributed between $185 million and $215 million to the exchange's total inflows and outflows.
The price of BTC has slumped today, down 3% to $22,887 at the time of writing, according to CoinGecko. The asset came close to reaching $24,000 on January 30, but resistance proved too strong.
Bitcoin price has remained flat for the past seven days but is up 8% in the past two weeks. Most of the gains in this rally were made in early January, implying that momentum is waning.
